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Hernando Today

Maybe It Is A Depression

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By TONY HOLT

Hernando Today

Published: March 7, 2009

TALLAHASSEE - Those who regularly see unemployed workers shuffle through the doors for their checks were expecting it.

Ken Russ of the Pasco-Hernando Workforce Board has seen everyone from cashiers and restaurant servers to accountants and registered nurses stroll into his office to request aid and job leads.

The numbers kept escalating.

"There are a lot of people hurting out there," Russ said.

Hernando County's unemployment rate jumped to 12.4 percent in January, reaching its highest level in 33 years.

Hernando has the second-worst job market in the state behind Flagler County, which recorded an unemployment rate of 14.2, according to state figures released Friday morning.

Both counties had a surging housing market less than three years ago. The halt in residential and commercial construction has hit them the hardest, according to the Agency for Workforce Innovation.

Hernando County's unemployment rate has gotten progressively worse since April 2008, when it was at 6.6 percent.

By December 2008, it reached 10.9 percent. Its average for 2008 was 8.3 percent.

Florida's unemployment rate for January is 8.6 percent, up from 7.6 percent the month before.

The national figure is at 8.1 percent, the highest since 1983, according to a recent report from the U.S. Labor Department.

The total number of jobs in Florida is down 355,700 in January compared to one year ago, according to state statistics. More than 100,000 of those lost jobs were in the construction industry.

Education, health services and total government were the only segments that gained jobs among Florida's major industries.

Most of the gains in education were in the private sector, Russ said.

Rebecca Rust, an economist with the workforce agency, told Russ and others during a conference call Friday morning that a recovery could begin taking shape by the second quarter of 2010.

To Olivier Garret, an economist and chief executive officer at Casey Research, such a prediction is overly optimistic.

Casey Research is an investment consulting firm based out of Phoenix.

The worst of it might still be on the horizon, namely escalating inflation, Garret said. He thinks it's inevitable given President Obama's aim to borrow $2.5 trillion to cover the nation's debt. That number is five times more than what was borrowed last year.

Other countries also are going through a recession, so they likely will refuse such a loan. That means more money will have to be printed in order for Obama to raise the $2.5 million, Garret said.

"We could see inflation starting in six months to a year," he said. "We could see hyperinflation, something we haven't seen since the 1970s or early 1980s."

The deficit makes the current economic crisis deeper than the Great Depression, Garret said. All states and counties with high unemployment will only see their numbers increase during the next 12 months and beyond.

"It is very grim," he continued. "We won't see any recovery for a couple years at minimum ... (Hernando County) could see unemployment at 20 to 25 percent. Yeah, that's very possible."

Unemployment typically is at its highest a year or so following a recession.

Hernando County's highest-recorded unemployment rate was in June 1976, when it topped off at 20.7 percent. That came after the recession of 1975.

There are 20 counties in Florida that had double-digit unemployment rates in January, according to state statistics.
Hernando County has a labor force of 63,560. A total of 7,875 are unemployed.

Throughout Florida, approximately 800,000 people are unemployed, according to the workforce agency.

"It's very tough right now," Garret said. "People's standards of living will decrease significantly ... People will have to reduce spending as best they can. Spending less and working harder is what we'll have to do."

Reporter Tony Holt can be reached at 352-544-5283 or wholt@hernandotoday.com.

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